It’s a hard time to be a farmer.
Crop prices are low due to big yields, and high fertilizer costs from President Trump’s tariff wars are stressing out the heartland.
John Deere, the iconic American tractor company, says its sales are down because farmers are reluctant to make big equipment purchases in the highly uncertain environment.
And if that weren’t enough, China is refusing to buy American soybeans because of the trade standoff between the world’s largest economies — a replay of tensions that led to a farmer bailout in Mr. Trump’s first term.
Key farming lobbies say the economic outlook is dire, so they’re looking for help from Washington.
“Soybean farmers are under extreme financial distress. Prices continue to drop, and at the same time, our farmers are paying significantly more for inputs and equipment. U.S. soybean farmers cannot survive a prolonged trade dispute with our largest customer,” the American Soybean Association told Mr. Trump in a recent letter.
In a similar letter, the National Corn Growers Association told senior Trump officials that fertilizer alone is forecast to account for 36% of a corn farmer’s operating cost in 2025. They said corn prices have dropped 14% since the beginning of the year.
Heartland farmers are bending Mr. Trump’s ear because they’ve been ardent supporters of him in the past and they know he wants to keep them in his corner.
Roughly 78% of voters in America’s most farming-dependent counties supported Mr. Trump in last year’s election, according to Investigate Midwest.
“I take care of the farmers. I love the farmers. They’re a very important part of this country, and we’re not going to do anything to hurt the farmers,” Mr. Trump told CNBC in a recent interview.
While Mr. Trump loves farmers, he’s also smitten with tariffs.
Earlier this year, Mr. Trump imposed a sweeping 10% tariff — a tax on foreign goods brought into U.S. markets — on all imports. More recently, the White House finalized tariffs from 15% to 41% on dozens of countries, raising levies to their highest levels in over a century.
The president is using tariffs to raise revenue and boost domestic manufacturing of key products. But the transition will take time, and the agricultural sector is grappling with added import costs.
Key exporters of phosphate fertilizers, such as Morocco, Saudi Arabia, and Egypt, are subject to a 10% tariff, while Jordan and Israel will see a 15% rate, according to S&P Global.
This year saw a huge increase in the U.S. corn crop. While that’s generally a good thing, it spurred an uptick in demand for springtime fertilizer, according to Veronica Nigh, a senior economist at the Fertilizer Institute.
“That was about the same time that we saw those tariffs hit, and so it created a lot of uncertainty in the import market,” Ms. Nigh said. “It was pretty bad timing.”
She said uncertainty around tariff levels from month to month also made buyers and sellers reticent to make purchasing deals, constricting supply and raising prices.
“U.S. corn growers are facing elevated prices on fertilizers and other inputs that are unfortunately approaching disastrous levels,” the corn growers association told Mr. Trump in August.
Sen. Charles E. Grassley, Iowa Republican, says farmers are constantly bringing up the cost of fertilizer with him. Events like the Urakine war and conflict in the Middle East are worsening the situation, he said, so he is pushing the administration to find ways to offer relief.
The senator secured an exemption from tariffs for potassium-based fertilizer, or potash, from Canada that complies with the U.S.-Mexico-Canada Agreement. He also pushed the administration to include potash and phosphate on an official list of critical minerals, which should speed permitting and spur domestic production.
“Today’s cost ratio of phosphate-to-corn prices is the worst ratio in history,” Mr. Grassley said on a midsummer call with agriculture reporters. “The issue will become even more acute in the fall, as farmers look to purchase next year’s fertilizer. I’ll continue pushing for the administration to keep farmer input costs in mind as it works its way on trade deals globally and even on domestic policy.”
Farm equipment also is affected by trade headwinds.
John Deere recently forecast that its pretax cost from tariffs in fiscal 2025 would be nearly $600 million, pointing to increased tariff rates on Europe, India and steel and aluminum. Farmers are reluctant to lay out cash for new equipment, resulting in lower sales.
“Given challenging industry fundamentals and evolving global trade environment and ever-changing interest rate expectations, our customers are operating in increasingly dynamic markets, which naturally drives caution as they consider capital purchases,” Josh Beal, director of investor relations, said on a John Deere earnings call in mid-August.
The administration and its Republican allies say help is on the way. For instance, “One Big Beautiful Bill” passed by the GOP-controlled Congress included payments to assist farmers.
“Clarity to the trade situation would be a plus, with Canada and China being prime concerns where some trade deal would be good,” said Gary Donald Schnitkey, a professor at the University of Illinois who studies farm economics. “There are many new benefits in OBBB, with those benefits skewed to southern crops such as cotton, peanuts, and rice.”
The payments, which help farmers and ranchers when crop revenue or prices fall below guaranteed levels, will be enhanced as of October 2026. But there is discussion about moving up that date or offering some kind of bridge assistance before then, Mr. Schnitkey said.
Senate Majority Leader John Thune, South Dakota Republican, said he spoke to farmers during the August recess about congressional efforts to help them weather challenges.
“We discussed how farmers are still struggling with high input costs and depressed commodity prices, causing upside-down margins for their operations,” he said Thursday in a floor speech. “While crop yields are strong and the One Big Beautiful Bill adjusted reference prices to ensure that commodity programs more closely reflect market conditions, there’s more work to do. That includes boosting agriculture through trade opportunities and increased market access.”
The Trump administration said its recent trade deals will open up markets, including a Japanese deal that requires the Asian superpower to increase U.S. rice imports by 75% and buy $8 billion worth of agricultural and crop products.
A U.S.-U.K. deal calls for the British to buy $700 million in ethanol exports and $250 million in other farm products, including beef.
“President Trump cares deeply about those who feed America, and he is quickly working to rectify decades of unfair trading practices while simultaneously cooling inflation to lower input costs,” White House deputy press secretary Anna Kelly said. “Thanks to this president, farmers can sell more goods to consumers in the European Union, the United Kingdom, Japan, and more under fairer trade deals. President Trump will continue to open markets and level the playing field for American farmers to ensure they can sell as many made-in-America products as possible.”
Cory J. Reed, president of Precision Ag at John Deere, told investors there are “positive tailwinds” from trade deals and “from what we see in tax policy.”
In the meantime, it’s “not a pretty picture,” said Clark Packard, a research fellow on trade at the libertarian Cato Institute.
“My advice for Congress and the president would be to eliminate all of the recently enacted tariffs and then look at ways to cut tariffs on other inputs that farmers and ranchers and others in the agriculture industry use,” he said, citing things like fertilizer and steel.
Meanwhile, soybean growers said the U.S. used to be the provider of choice for Chinese buyers. Yet those buyers are turning to alternative sellers in Brazil because of trade tension and retaliatory tariffs.
U.S. soybeans entering China face a duty 20% higher than the one charged on South American beans.
Mr. Trump, in a Truth Social post, urged China to quadruple its soybean orders. He ensured “rapid service” to meet demand.
The growers’ association said it appreciated Mr. Trump’s request, but “unfortunately for our soybean growers, China has contracted with Brazil to meet future months’ needs to avoid purchasing any soybeans from the United States.”
“China has not purchased any U.S. soybeans for the months ahead as we quickly approach harvest,” the association said. “The further into the autumn we get without reaching an agreement with China on soybeans, the worse the impacts will be on U.S. soybean farmers.”
Farmers faced a similar situation with China during Mr. Trump’s first term. The tariffs and retaliation forced Washington to pony up billions in bailout money for farmers.
“The president has decided to cause panic once again in the soybean fields of America, and the cause is, once again, tariffs on Chinese imports. This time, the duties are even higher,” said Ross Baker, a politics professor at Rutgers University. “Sadly, the American soybean farmers should have seen this coming. They must sit through the re-run of another threat to their livelihoods.”
